Cryptocurrency forks of various types now take place on a regular basis. Even bitcoin has experienced several iterations and different branches in this way. One of the largest and most discussed bitcoin forks took place at the end of 2017.
Bitcoin Gold was a hard fork of the original open source cryptocurrency that took place on October 24, 2017. While hard forks are carried out for various reasons, including for the purpose of scaling as a cryptocurrency customer base grows, or due to developer conflict and goal differences, bitcoin gold’s stated purpose has been to “make bitcoin decentralized again.”
On the surface, the idea of “making bitcoin decentralized again” may seem counterintuitive. Bitcoin, like all other cryptocurrencies, is designed to be decentralized already; it is not tied to any central bank, particularly a country or governmental body.
One of the main problems with bitcoin that drove the development of bitcoin gold, however, was not related to the issue of central issuance at all. Rather it had to do with the mining process. Bitcoin Gold developers believed that by adopting a new algorithm for the mining process (in this case, a so-called proof-of-work algorithm called Equihash), the new branch of the world’s most popular cryptocurrency by market capitalization would not disproportionately favor major mining operations.
Democratizing the mining process
Bitcoin mining is a lucrative but resource-intensive process. The most profitable mining enterprises are often those that group a large number of mining platforms, each of which requires expensive and special equipment. (See more: How Does Bitcoin mining work?)
People who try to mine bitcoin on their own have to invest a lot of money and time in creating their own platforms, or they are spent in the process, since their computers cannot compete with professional platform systems.
One of the main goals of bitcoin Gold has been to change the algorithm by which the cryptocurrency is mined, which means that the mining process cannot be run faster on specialized equipment than on standard computer systems.
Bitcoin Gold was not the first big hard fork of bitcoin. Bitcoin Cash forked from the main cryptocurrency in August 2017.
In 2018, bitcoin is anticipating several additional hard forks, leading some to speculate that there may be diminishing returns in terms of investor interest as more bitcoin ramifications hit the market. (See more: Bitcoin vs. Bitcoin Cash: what’s the difference?)
Distribution, Protection, Transparency
In addition to the goal of “redentralizing” bitcoin, the developers of bitcoin gold also focused on issues related to distribution, protection and transparency. “The hard fork bitcoin blockchain fairly and efficiently distributes a new digital asset immediately to people around the world who have an interest in cryptocurrencies,” the bitcoin gold website states.
In the world of virtual currencies, threats from hackers and other malicious entities are constantly a concern. For that reason, bitcoin gold took additional security and protection measures from the time of its launch, in an effort to help secure its customers ‘ accounts and currencies. These include playback protection and unique wallet addresses. (See also: can Bitcoin be hacked?)
The fact that bitcoin gold is “a free open source software project created by volunteer developers and supported by a rapidly growing community of bitcoin enthusiasts that spans the globe” is also an attraction for potential customers.
Bitcoin Gold on exchanges
For all cryptocurrencies, one of the main factors that helps determine short-and long-term success is their availability on cryptocurrency exchanges. Users must be able to access cryptocurrency on exchanges to make transactions.
According to the website of bitcoin gold, as of march 2018, the criptomoneda was trading live in Bithumb, Bitfinex, Binance, Bittrex, HitBTC, Uphold, YoBit, Gate.io, Changelly, Shapeshift, BitBay, Abucoins, Change Now, Evercoin, Tdax, Bitsane, Bitstarex, QuadrigaCX, Cex.io, Okex, Anybits, BestRate, Bitmarket, Indacoin, CoinSwitch and Unocoin.
There are additional exchanges scheduled to offer bitcoin gold in the near future as well. Cryptocurrency is also available through a number of wallet services including Trezor Wallet, Ledger Wallet, Exodus, Coinomi, Bitpie, Guarda, Freewallet, BTGWallet and Kasse. According to the website, cryptocurrency has been listed on 46 markets and 26 exchanges as of January, 2018.
Release and controversy
Bitcoin gold developers used what is called “post-mine” after the launch. This was the retroactive extraction of 100,000 coins after the fork has already taken place. The way this happened was through the rapid mining of around 8,000 blocks, the results of which were reserved as a kind of “endowment”, to be used to grow and maintain the broader bitcoin Gold network.
About 5% of those 100,000 coins were reserved for each of the six main team members as a bonus. At the time of launch, all bitcoin owners received bitcoin gold coins at the rate of one bitcoin Gold token for one bitcoin token.
Coinbase, one of the world’s largest cryptocurrency exchanges, was remarkably skeptical of bitcoin gold at the time of launch. Coinbase representatives stated that the exchange ” cannot support bitcoin gold because its developers have not made the code publicly available for review. This is a major security risk.(See also: Coinbase Hit with 2 lawsuits: accused of insider Bitcoin Cash Trading.)
As of March 4, 2018, bitcoin gold has 253 accessible nodes. The highest concentration of nodes is found in Germany (46 nodes), with the United States (38), France (37) and Russia (18) following the highest levels.
In February 2018, bitcoin gold launched the bitcoin Gold knowledge Explorer, calling it a ” fully functional bitcoin Gold knowledge instance and web application service that features the Insight User Interface and Insight API.”
Like most cryptocurrencies, bitcoin Gold has had its share of detractors and controversies. Just days after the launch, miners accused one of bitcoin gold’s developers of adding a 0.5% mining fee that was hidden from the mining community.
The future of Bitcoin Gold
According to the bitcoin gold website, the cryptocurrency maintains ambitious plans for expansion in the future. In the first quarter of 2018, for example, the website says its goals include “open source library integration” with BitcoinJS, BitcoinJ, and CoPay, as well as “academic and university collaboration” and “design and rebranding,” including an updated website.
In the second quarter of 2018, the digital currency aims to integrate a lightning network and decentralized mining through P2Pool. There is also a plan to integrate a debit card program and other payment system integrations.
At the end of 2018, the cryptocurrency aims to develop “side chains and atomic swaps between chains,” as well as a series of developer meetings and conferences, university outreach and more. Looking ahead to 2019, cryptocurrency has its eye on private transactions and scholarship or research support.
In the long term, bitcoin gold will conduct research on smart contracts and blockchain democracy, as well as develop a decentralized fiat-crypto brokerage network. (SEE ALSO: How did Bitcoin Gold prices perform in 2017?)
Bitcoin Gold developers are aware of the connections between this cryptocurrency, its bitcoin Matrix and the wider world of digital currency. As such, they indicate that ” the major improvements we are working on are of great interest in the broader bitcoin and crypto worlds, not just for bitcoin Gold.They said some of these unilaterally applicable improvements may include scalable ways to address hard forks, “smart voting mechanisms” and decentralized decision-making for digital currency development.